It Is Never Too Early or Too Late to Save for Retirement

Retirement planning suffers from two natural tendencies – in our 20s, we can’t imagine ourselves at retirement age and are less motivated to save for some future-self, and in our 50s we throw up our hands, full of regret that we didn’t start sooner and resigned to working forever or retiring in poverty.  But, as retirement planning experts like Keith Springer will tell you, it is never too early or too late to start saving for retirement.

“I’m Too Old to Start Saving for Retirement”

With the pressures of starting a career and a family in your 20s and 30s and paying for the kids’ education or perhaps caring for aging parents in your 40s, maybe you find yourself in your 50s without a penny in retirement savings and full of regret that you didn’t start saving earlier.  Maybe, this regret is more like a full-blown panic, and you are wracked with fear that you will have to work until you drop or will live in poverty after you retire. But the truth is that while it is better to start saving when you are young, it is never too late to begin saving for your retirement. In fact, as you enter your 50s, the heavy expenses that come with raising a family are mostly behind you, and you are probably earning more now than you were in your 30s.  So don’t back away from the challenge!  Think carefully about your risk profile, which is partly about how many more years you have to work, and how much you think you will need to fund the lifestyle that you want after you retire.  Talk to a professional who can advise you about the best options given your circumstances and expectations, and then move forward in a purposeful way to save for a realistic retirement.

“I’m Too Young to Start Saving for Retirement”

When you are just graduating from college, starting your career or perhaps a family, it is very difficult to imagine that there will ever be a time when you are not working.  And the needs of the present – buying a first home, paying for childcare, repaying student loans – definitely seem more urgent than whatever your 60-year old self might need.  But, thankfully, if you start early, even the smallest savings can generate a significant portfolio or bank account by the time you are ready to retire.  As The Wealth Barber famously demonstrated, just $100 a month when you’re in your mid-twenties turns into a million dollars by the time you retirement thanks to compound interest.  Time and market trends are definitely work in your favor if you start young. You don’t need to have a firm plan in mind, so don’t let uncertainty about family or career commitments keep you from saving – you can always scale back your saving if you need to at different points in live, but you can never go back and start earlier.  Think in general terms about the kind of life you want to have in your senior years and to begin thinking about how to make it happen.  Are you interested in early retirement?  Do you want to live on a tropical island?  Plan for it!

Retirement, like other important stages of life, will happen whether you plan for it or not – but it is so much better if you take control and plan for it today!